Analogy cost estimating technique uses?

Analogy cost estimating technique uses?

• A. A technique that uses detailed engineering data to estimate costs.
• B. An examination by a Congressional Committee.
• C. A technique that uses historical data from similar projects to estimate costs.
• D. The real costs incurred for a project.

Answer: (C)

Analogy cost estimating relies on using costs from a similar past project to forecast the current project’s costs. The key idea is to identify a previous project with a comparable scope, size, and complexity, then adjust that historical cost for differences such as inflation, location, labor rates, productivity, and schedule. This approach provides a quick, data-driven baseline grounded in real-world experience, which is especially valuable when detailed designs aren’t available yet. It’s strongest when the projects truly resemble each other and the adjustments for differences are thoughtfully applied; if the base project isn’t truly comparable or market conditions have shifted significantly, the estimate can be less accurate. This is in contrast to using detailed engineering data to build a bottom-up estimate, which requires more specifications, or relying on actual costs incurred, which are not predictive estimates, or options that involve external committee review rather than estimation methods.

Analogy cost estimating relies on using costs from a similar past project to forecast the current project’s costs. The key idea is to identify a previous project with a comparable scope, size, and complexity, then adjust that historical cost for differences such as inflation, location, labor rates, productivity, and schedule. This approach provides a quick, data-driven baseline grounded in real-world experience, which is especially valuable when detailed designs aren’t available yet. It’s strongest when the projects truly resemble each other and the adjustments for differences are thoughtfully applied; if the base project isn’t truly comparable or market conditions have shifted significantly, the estimate can be less accurate. This is in contrast to using detailed engineering data to build a bottom-up estimate, which requires more specifications, or relying on actual costs incurred, which are not predictive estimates, or options that involve external committee review rather than estimation methods.